Budget draft calls for slight spending decrease, no tax increase

Posted 6/5/20

There were some shifts in funds, but generally, things will stay pretty much the same on Siler City’s bottom line next year.

Siler City Town Manager Roy Lynch introduced the …

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Budget draft calls for slight spending decrease, no tax increase

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Posted

SILER CITY — There were some shifts in funds, but generally, things will stay pretty much the same on Siler City’s bottom line next year.

Siler City Town Manager Roy Lynch introduced the proposed town budget for fiscal year 2020-2021 Monday night. The spending plan calls for a nominal decrease of less than three-tenths of a percent in expenses while keeping the town’s property tax rate at 54 cents.

In his budget message to town commissioners, Lynch said that in January, when the board met to discuss the spending plan, they “had no idea what was ahead,” referencing COVID-19.

“The budget process is occurring during a time of uncertainties due to the economic impact of this global pandemic and has affected the operations of our entire organization,” Lynch wrote. “Siler City is fortunate to remain a financially strong town and although this budget does not fund all requests, it does address top priority needs.”

Lynch attributed the spending decrease — which leaves the projected total budget at $15,742,307 — to reductions in anticipated sales tax and Parks and Recreation fees, which, in addition to property taxes, provide revenue for the town’s general fund. The general fund is the town’s account which handles much of the business of the town including salary, equipment and supplies for a majority of its departments.

The proposed budget also keeps the fire district tax rate at 12 cents.

Lynch said in an executive statement that “continued conservative management of the Town’s finances” was “critical” to the town’s “fiscal health.” That said, there were still multiple increases in specific departments, including:

• More than $36,000 for Building and Grounds, which comes from adding Court maintenance and lease payments into the department

• More than $15,000 for continuing full-time hours and increased training for the Siler City Police Department’s domestic violence advocate

• A 3 percent hike in Public Works to match overtime projections and Duke Energy utility rate increases

But the budget plan also accounted for decreases in spending in Finance, Human Resources and Fire — mostly related to travel, training and capital expenditures undertook last fiscal year. Additionally, the Police Department requested seven new vehicles, but none were granted “due to the revenue constraints along with the conservative approach not to incur any additional debt service at this time.”

However, the document states, “the funding of fleet replacement, especially within public safety-related operations, is critical and must be reviewed at quarterly increments during the coming fiscal year.”

Lynch said that property tax revenue is anticipated to remain constant as the recent property valuations remained stable. Lynch anticipates the town’s sales tax revenue will decrease by approximately $40,000. Conversely, utility taxes are expected to increase by approximately $14,500.

Lynch is also anticipating a decrease in water and wastewater revenues because of the suspension of dine-in services, school closures and the suspension of disconnect and late fees for water and wastewater services. Those fees support the town’s water and sewer funds which must be used exclusively to support the town’s water and wastewater services. Though those losses are considered significant, Lynch notes that an increase in the Powell Bill Funds, which come from the state to support equipment for street maintenance, paving and sidewalk repair, has “offset” some of the losses.

The proposed budget also includes new fees based on contracts held for planning operations that are conducted by Chatham County or other private entities contracted by the town. Fees for water and wastewater will remain stable, but an “after hours” re-connect fee of $75 was added. In addition, fees for trash services will increase by 3.2 percent because of increased charges by the service provider Waste Industries.

Lynch said that the board should revisit the budget in the second quarter of the fiscal year and review any deviations from the anticipated revenues. As several requests for funding, including non-profit funding and additional police vehicles for the Siler City Police Department, were not included in the proposed budget, a regular review during the fiscal year would allow for updates to the budget.

The town of Siler City will hold a virtual public hearing on the proposed budget at 7 p.m. on June 15, using Zoom technology, from Siler City’s Town Hall Courtroom.

Reporter Casey Mann can be reached at CaseyMann@Chathamnr.com.

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